for example when Vin = -4V through -.7V will the zener diode operate like a normal diode?

and then cease operation until the reverse breakdown voltage of 2.7 through 3.7 volts is reached?

at 3.7 volts i assume all current would flow through the normal diode on top due to Rzener.

Yes, current can flow in bot directions since the zener in the back direction looks like a reular diode, forward-biased.

EDIT: oops, not quite everything right.

A t some + input voltage Vin, the regular diode anode voltage Vd will exceed +3.7V and conduct. Any further increase in Vin will result in all of the ADDITIONAL current diverted thru the regular diode.